This paper is an examination of the Swedish housing sector institutions with particular emphasis on the public control measures on the demand and supply sides. Our observations are relevant to the metropolitan housing markets of Greater Stockholm, Greater Goteborg and Greater Malmo, although main points also apply to the non-metropolitan part of Sweden. In the literature on the Swedish housing sector, a single comprehensive statement of how this sector is structured, how it operates and how it is controlled by various government policy instruments, does not exist. 1 It is hoped. that the current paper provides the first comprehensive view that can be a starting point for future, more detailed investigations. The Swedish housing sector is based on social values and attitudes quite different from those prevailing in purely free-market oriented societies such as the United States. It is therefore useful to many societies that the Swedish situation be evaluted from the vantage point of free market urban and housing economics. The free market perspective helps identify" distortions" which are induced by various government controls. From the Swedish perspective, these are not distortions, but policy interventions justified for the sake of distributive justice and entitlement. Rent controls and the institution of rationing new dwellings are among such policy interventions. Nevertheless, there are some important similarities (and differences) between the Swedish and American policies with regard to the deductibility of home owners' interest payments, the taxation of capital gains and the levying of a" property tax" proportional to assessed value.

We identify a number of policy issues which are of concern to Swedish economists and politicians. These are the interactions between government subsidies, housing sector performance and macro-economic policy, planning the expansion of the stock by region and municipality, and the rationing of new dwelling more efficiently.